BROS Up 23% in a Month, Valuation Stretched: How to Play the Stock?

Dutch Bros Inc. (BROS) shares have surged 22.8% in the past month against the industry’s decline of 0.1%. In the same time frame, the S&P 500 has gained 2.3%. Dutch Bros is thriving, thanks to strong transaction growth, high-performing new shops, a deep operator pipeline, innovation-led engagement and disciplined financial management.

Price Performance

Closing at $71.83 in the last trading session, below its 52-week high of $86.88 but above its 52-week low of $30.45. In the past month, shares of other industry players like Starbucks Corporation (SBUX), Yum China Holdings, Inc. (YUMC) and Texas Roadhouse, Inc. (TXRH) have declined 1.8%, 3.8% and 6.6%, respectively.

Factors Aiding BROS

Dutch Bros continues to see healthy customer traffic, with system same-shop sales up 6.1% and transaction growth of 3.7% in the second quarter of 2025. This marks another consecutive quarter of traffic gains, which is especially notable in today’s restaurant landscape, where many peers struggle with guest counts. The momentum stems from a multi-pronged strategy, innovation, targeted marketing, and loyalty engagement that has created consistent demand.

The company is also benefiting from expansion efforts. BROS opened 31 new shops in the second quarter of 2025, including entry into Indiana, its 19th state. Importantly, new shops are performing strongly right out of the gate, with system-wide AUVs at $2.05 million, near record levels. Dutch Bros expects to open at least 160 shops in 2025, supported by a disciplined market planning process, strong real estate capabilities, and an operator pipeline of more than 450 candidates. Elevated shop productivity demonstrates that the brand resonates even in new markets far from its West Coast roots.

Management reiterated its ambition to grow from just over 1,000 shops today to more than 2,000 by 2029, with a long-term potential of 7,000 shops nationwide. The brand’s strong customer love, consistent lines at openings, and early traction in new geographies highlight the significant white space opportunity ahead.

Dutch Bros is relying on a three-pronged strategy to drive transactions and maintain customer traffic growth. The company continues to spark excitement through menu innovation, rolling out seasonal beverages and limited-time offers, such as Lavender and Dulce de Leche, along with creative engagement initiatives like friendship bracelets and the Dutch Cozy. At the same time, stepped-up paid advertising is lifting both aided and unaided brand awareness, particularly in newer markets where the company is focused on closing the awareness gap. Complementing these efforts, the Dutch Rewards program now accounts for 72% of transactions, up five points year over year, giving the brand powerful tools to personalize offers, segment customers more effectively, and build stronger long-term relationships.

Digital ordering is gaining traction, with order-ahead accounting for 11.5% of sales at the end of second-quarter 2025, and doubling that in some newer markets. Walk-up windows now contribute around 15% of transactions, easing drive-thru bottlenecks. Enhanced dashboards and labor deployment models are boosting throughput, while food pilots show encouraging results in driving incremental morning traffic and ticket lift.

Dutch Bros’ Estimate Revisions

In the past 30 days, the Zacks Consensus Estimate for 2025 and 2026 has been revised upward by 11.9% to 66 cents and 4.9% to 85 cents, respectively. These estimates indicate year-over-year growth rates of 34.7% and 28.4%, respectively.

Meanwhile, Starbucks, Yum China and Texas Roadhouse earnings in the current year are likely to witness a decline of 33.2%, growth of 7.3% and 2.6%, respectively.

BROS Trades at Premium Valuation

Dutch Bros is trading at a premium to the industry, with a forward 12-month price-to-sales of 6.38X, which is well above the industry average of 3.78X. Meanwhile, Starbucks, Yum China and Texas Roadhouse are trading at P/S ratios of 2.56X, 3.78X and 1.82X, respectively.

P/S(F12M)

End Notes

Despite its premium valuation and sharp stock gains, Dutch Bros offers a compelling long-term growth story that can justify investor interest. The company is delivering consistent traffic growth in a challenging industry backdrop, supported by strong new unit performance, a robust pipeline of operators, and a culture that fuels brand loyalty. Its three-pronged transaction strategy — built on menu innovation, targeted advertising, and an expanding loyalty program — has proven effective in sustaining customer engagement while digital initiatives and food pilots add fresh layers of growth. With a clear roadmap for aggressive national expansion and rising analyst confidence in its earnings outlook, Dutch Bros stands out as a high-quality growth name where stretched valuation reflects genuine momentum and substantial future potential.

BROS currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research